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THE “CROWN JEWEL” OF THE INTERNATIONAL TRADE ORGANIZATION: MSD

Did you know that at the international level there is a body that is considered the most developed dispute settlement system in any international treaty regime? The development proposed by the International Organizations since their creation has produced all kinds of impacts within the international community, since a series of new juridical groups have been constituted, and a commitment to the effectiveness of International Law has taken root on the part of the inter-state actors, which has been at the service of the protection and advancement of civil society, in addition to the generation of parameters of cooperation, development and conflict resolution among the States.
The market is not perfect, and is constituted -among other things- by gaps in its structure and operation, which merit the imposition of certain legal schemes that are harmonious with the different political and economic realities, understanding that the variety of economies and national markets, require the existence of intermediary mechanisms since trade between States, among other issues, is based on the difference of comparative advantages between their economies, which in some cases may constitute affectations to commercial interests and their rights.
In this sense, the procedures established by the World Trade Organization (WTO), in the presence of actions or omissions, practices, or regulatory measures deployed by its Members, have constituted one of the main legal instruments through which the different countries can defend their commercial rights and interests. To that extent, these rules are a reference to which almost all Members resort for the settlement of their disputes at the bilateral and multilateral levels, with the aim of resolving the dispute within the WTO framework.
The Dispute Settlement Mechanism (DSM) is then created, which has a firm legal and institutional basis that marks a shift from a system based on economic power to one based on rules in order to avoid international tension, thus constituting an instrument of great value especially for developing countries, Given their need to have access to external markets to take advantage of the benefits of globalization, and that within the international arena, they do not have sufficient economic power to generate influence through commercial diplomacy oriented to a greater extent by power, and in this sense, they cannot impose themselves against those who do have this attribute, and as a result are in a vulnerable position due to the pressures in favor of protectionism.
Its activity is carried out in four main stages, each with a defined time frame for the resolution of disputes: first, the holding of the consultation; second, an initial review by an ad hoc panel called “panel” who issue a report; third, the appeal for review before the WTO Appellate Body of a permanent nature, and finally, an arbitration stage after the ruling where recommendations are made to be implemented.
Globally, this body has been one of the most active legal systems, with more than 500 disputes initiated as of 2015. The participation of Latin American and Caribbean countries has been very important since the establishment of the World Trade Organization (WTO) through the Marrakesh Agreement.
Between January 1995 and the beginning of 2015, these countries initiated 117 cases as claimants and were listed as defendants in 93 cases, equivalent to 24% and 19%, respectively, of the total number of cases initiated in those 20 years.
According to the data presented by the WTO, countries such as Brazil, Mexico, Argentina and Chile are highly active and regional participation in the DSM is largely concentrated in these countries. They represent 63% of cases in which a country is the claimant and 69% in which it is the defendant, occupying first, second, fourth and eighth place, respectively. In fact, not counting Chile, these countries have submitted more inquiries for claims than China, the world’s leading exporter of goods.
This reveals the importance that this legal pillar has acquired as a forum for ensuring effective compliance with the rights and obligations of each of the WTO Member States under the various agreements, especially because it has a significant enforcement capacity, greater than the equivalent mechanisms at the regional level in some countries.
This presents an important challenge for the countries to strengthen their capacities in terms of compliance with rights within the multilateral trading system, especially in the case of smaller countries and/or those with lower per capita income, where there are greater concerns about their violation.
By: Santiago Torres García

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